Medicaid Block Would Shift Financial Risks and Costs to States

Some states may mistakenly believe that proposals to convert Medicaid into a block grant or otherwise cap federal funding would make their Medicaid costs more predictable and stable over time.  In reality, a block grant is intended to provide predictability for the federal government by replacing the current financing system, under which the federal government pays a fixed share of a state’s Medicaid costs, with one in which the federal government would pay only a fixed dollar amount and leave the state responsible for all remaining costs.  This is a radical change that would significantly shift both financial risks and costs to the states.
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